The Cookie Crumbles as Google Hammers the Final Nail into the Third-Party Data Coffin

As part of Google’s wider ‘pivot to privacy’, they announced this week that they want to remove third-party cookie support from Chrome within two years.

Safari and Firefox have already rolled out tools for blocking them, but Google up until recently took the middle ground while Apple took an aggressively pro-privacy line.

Chrome users account for 67% of the browser market though, so this announcement from them makes it official, in the long run – third-party cookies are dead.

This shouldn’t be a great surprise to publishers, it’s the way the industry has been heading for a while.

Google is following a path toward slowly phasing out the use of cookies across the web. They see which way the wind is blowing:

“Users are demanding greater privacy–including transparency, choice and control over how their data is used–and it’s clear the web ecosystem needs to evolve to meet these increasing demands”

In the post announcing the move – the Chrome team seemed to criticise the moves of other browsers:

“Some browsers have reacted to these concerns by blocking third-party cookies, but we believe this has unintended consequences that can negatively impact both users and the web ecosystem. By undermining the business model of many ad-supported websites, blunt approaches to cookies encourage the use of opaque techniques such as fingerprinting (an invasive workaround to replace cookies), which can actually reduce user privacy and control”

They know that the whole online ecosystem needs some time to adapt to the new reality – to test, learn and build around it.

“We are confident that with continued iteration and feedback, privacy-preserving and open-standard mechanisms like the Privacy Sandbox can sustain a healthy, ad-supported web in a way that will render third-party cookies obsolete. Once these approaches have addressed the needs of users, publishers, and advertisers, and we have developed the tools to mitigate workarounds, we plan to phase out support for third-party cookies in Chrome. Our intention is to do this within two years”

So what does this mean for publishers?

It depends.

Of course, publishers stand to lose out on programmatic ad revenue without third-party targeting. Media buyers haven’t been able to see users coming in through Safari or Firefox since last year, and that’s already impacted revenues.

As Google pushes on with their ‘privacy sandbox’ initiative, this will accelerate. A recent study estimated that publishers will lose around 52% of their revenue if Chrome restricts cookies.

All is not lost though, in fact quite the opposite.

Smart publishers have seen this coming, and through 2019 looked for ways to reduce their reliance on third-party data and start to leverage their own first-party data more effectively.

This makes sense. You own your first-party data – you have a legal right to access and process data from your own users.

Although you might lose out on ad revenue in the short term, this is a huge opportunity.

Writing in Digital Context Next, Kristy Schafer put it this way:

“Instead of putting their destiny in yet another external company’s hands, every publisher should see this new world as an opportunity, in which they are the primary, and indeed only, online advertising data supplier. Let’s call it the data 2.0 opportunity”

Think about all the data you could collect on your audience – their location, what they’re interested in and more.

If you don’t think about these things now, and you haven’t cared about first-party data in the past – now is the time to start doing so in earnest.

Start thinking about how you can collect as much valuable data on users as possible.

Once you have it though, what do you do with it?

Writing in A Media Operator, Jacob Donnelly summed up the steps involved:

  1. Start developing the systems now to collect and store that data. I would wager many customer data platforms are emailing operators desperate to get your business.
  2. Figure out a relationship with the engineers and data analysts to figure out how to package this data into an actionable format.
  3. Work with sales to create specific products that advertisers want to buy. By targeting based on first-party data, publishers should be able to charge more.

This is the real challenge. Major publishers with deep pockets are obviously in a better position to build new infrastructure and adapt quickly. What about smaller operations though?

Well, I can’t say for sure. The good thing is that you now have two years notice to work on the problem. There is also likely to be a proliferation of effective solutions developed by the same ad-tech companies that got rich of third-party cookies in the first place.

At the end of the day – this is a $19 billion opportunity (at least) for publishers in the US alone.

It’s clear that across the entire industry – that close, personal connection with loyal readers is what you need to succeed whether that’s through subscriptions or ad revenue.

Good luck to you through the cookiepocalypse.

 

 

 

 


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Written by
Thomas Goss

I'm MobiLoud's marketing manager.

I write about media trends and business models - and host the Digital Media Growth Podcast, where I interview fascinating people from the world of digital publishing.

When I have time I like reading, skiing, fitness, cooking and learning languages.

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